Who Should File Income Tax Return (ITR) and Why? [AY 2025–26 Guide]

Contents Covered

• Updated for Financial Year 2024–25 (Assessment Year 2025–26)
• Mandatory Cases: Who Must File ITR?
• Voluntary Filing: Why You Should File ITR Even If Not Mandatory
• Due Dates to Remember – AY 2025–26
• Conclusion: Don’t Miss Filing If You’re Eligible
• Updated for Financial Year 2024–25 (Assessment Year 2025–26)

Filing your Income Tax Return (ITR) isn’t just for salaried employees or people with high income. In India, several categories of individuals are mandated to file ITR, and in some cases, it is beneficial even when not compulsory.
In this post, we explain who should file ITR and why it’s important — legally and financially.

✅1. Mandatory Cases: Who Must File ITR?

You are legally or practically required to file ITR in the following situations:

a) Income Exceeds Basic Exemption Limit
If your gross total income (before deductions under Chapter VI-A like 80C, 80D, etc.) exceeds:
₹4 lakh
➡️ ITR must be filed — even if your tax liability becomes zero after deductions.

b) TDS Deducted and Tax Liability is Lower and resulting in Refund
If tax has been deducted from your income (salary, interest, commission, etc.) and your final tax liability is lower or nil — ITR must be filed to claim a refund.

c) To Avoid Future Litigations Due to TDS
Even if your total income is below taxable limits, if TDS has been deducted, it is advisable to file ITR. This helps prevent future scrutiny, mismatch notices, or queries from the department.

d) Foreign Assets or Income
Anyone holding foreign bank accounts, property, or being a signing authority in foreign entities is required to file ITR — regardless of income level.

e) High-Value Transactions
ITR filing is compulsory if you have:

Deposited ₹1 crore or more in a current account

Spent over ₹2 lakh on foreign travel

Paid over ₹1 lakh as electricity bill

Paid Credit Card Bill for ₹10 lakh or more

f) Property Purchase or Sale
If you have purchased any property, especially of significant value, it is advisable (and often expected) to file ITR to report the source of funds and maintain financial transparency.

g) Reported Transactions in AIS / TIS
  If your AIS (Annual Information Statement) or TIS (Taxpayer Information Summary) reflects financial transactions (e.g., investments, large deposits, mutual fund redemptions, rent, etc.), you should file ITR to avoid mismatch and future tax notices.

h) Crypto or Virtual Digital Assets Transactions
If you have bought or sold cryptocurrencies or NFTs, the income from such transactions is taxable at a flat 30%, and filing ITR is mandatory — even for a single trade.

i) Business or Professional Income / Carry Forward of Losses
If you’re running a business or profession or want to carry forward a loss (capital gain, house property, or business loss), ITR must be filed within the due date.

✨2. Voluntary Filing: Why You Should File ITR Even If Not Mandatory

Even if you’re not legally bound, filing ITR is still recommended in many situations:

a) Apply for Visa or Loan
Many embassies and banks ask for ITR acknowledgements as proof of income.

b) Maintain Financial History
A clean filing record helps in getting credit cards, business funding, and building financial trustworthiness.

c) Get Tax Refunds
Even if your income is below exemption, you can get back TDS deducted (e.g., from FD interest) by filing ITR.

d) Startups, Freelancers, Students Earning Online
Even irregular or small income (from YouTube, freelancing, crypto, etc.) may need to be declared and documented through ITR.

📝3. Due Dates to Remember – AY 2025–26

📌 4. Conclusion: Don’t Miss Filing If You’re Eligible

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